Equity markets in London and Europe suffered more losses on Thursday following major falls in the US and across Asia as the economic gloom deepened.

Fears that recent financial rescue plans will not be enough to avert a deep and prolonged global recession ensured even some of the traditional safe havens like gold and Japan's yen currency were left exposed to losses.

Commodities prices extended their losses, with crude oil in New York approaching the $70 a barrel level and copper, the base metals bellwether, tumbling to a 34-month low on concerns that the previously booming global construction business is coming to a halt.

Miners and metal and oil producers lost heavily for a second day as metals and crude prices slid. Retailers, luxury brands and leisure and travel stocks also took a hit as rising unemployment and slowing business activity tightened consumer spending.

In the currency trading emerging markets were the main casualties. The South Korean won and the Turkish lira were under significant pressure but the florint recovered some of Wednesday's losses after the European Central Bank agreed to lend the Hungarian florint €5bn.

By midday in London, most indices had come off their worst levels. The FTSE 100 was down 2.5 per cent to 3,975.2. In Europe, the FTSE Eurofirst 300 fell 2.6 per cent to 880, while Germany's Xetra Dax lost 1.8 per cent to 4,772.63, paring an earlier 6.2 per cent fall.

In Asia, the Nikkei 225 Average in Tokyo recorded its worst fall since the 1987 crash, tumbling 11.4 per cent. The Hang Seng in Hong Kong lost 4.8 per cent, and Seoul's Kospi shed 9.4 per cent.

This followed heavy overnight losses in New York where stocks also had their worst day since the 1987 market crash after a run of dismal data that showed slowing retail sales and falling economic activity across the US. However, US futures were indicating a higher open on Wall Street on Thursday helping European equity markets recover some of their losses. Third quarter results from Nokia that were in line with earlier downward revised guidance also helped sentiment.

Thursday see the release of more US data following weak US retails figures in the previous session. Weekly jobless claims, consumer prices for September, industrial production for September, a Philadelphia-area manufacturing survey for October and the NAHB housing index for October are all due.

The focused remained on the banks in Europe where the Swiss government took a 9 per cent stake in UBS, ploughing in SFr6bn of capital into the ailing bank, as the country's central bank said it would buy toxic assets worth up to $60bn. Its shares turned around opening losses and rose 3.7 per cent to SFr20.98.

Credit Suisse said it would not need to accept government funds, and instead turned to a small group of large investors, which include sovereign wealth fund Qatar Holding, to raise SFr10bn. The shares were up 6.8 per cent to SFr49.10.

In the commodities market crude oil prices fell further towards $70 a barrel, a day after falling 50 per cent below its peak. In midday trading in London, Nymex November West Texas Intermediate fell $2.25 to $72.79 a barrel. Earlier it hit a 13-month low of $71.21 a barrel. ICE November Brent fell $3.14 to $67.66 a barrel.

Olivier Jakob, of Swiss-based consultant Petromatrix, said: "If the global markets are not able to provide a 'V-shaped' recovery and global deleveraging continues, the [oil price] risk for the next 30 days is clearly skewed to the downside."

Base metals also extended their losses, with copper for delivery in three months at the London Metal Exchange dropping 3.5 per cent to $4,650 a tonne. Earlier, copper fell to $4,545 a tonne, the lowest level since January 2006.

Lead dropped 5.5 per cent to $1,415 a tonne while zinc tumbled 7.2 per cent to $1,206 a tonne.

Spot gold prices in London were $10 down to $835.15 a troy ounce as investors worried about a global recession sold commodities baskets products that, among other raw materials, include bullion.